Who will secure our energy future?

The focus on emissions has clouded the fact that no political party has outlined a cohesive strategy for securing a reliable energy supply for Australia over the next decade.

There will be six full calendar years between Tony Abbott’s probable election as prime minister this Saturday and 2020.

It’s a relevant point to make as the campaign draws to a close amid much commentariat chatter about Abbott’s “Direct Action” approach to reducing Australian greenhouse gas emissions.

During these six years, regardless of what it may do about building wind farms and other renewable energy activities, China alone will commission the rough equivalent of Australia’s coal-fired power station fleet every year.

Add in the other dozen or so countries with plans for coal-fired power construction on any scale and, by 2020, there will be some 12 times as much new coal-burning generation capacity in use internationally than exists in Australia today.

During these six years, despite the carrying-on of Christine Milne and the Greens, the most Australia will do — assuming Abbott does not have access to a majority of Senate votes — is require local emitters to buy a large amount of credits on the international market, throw subsidies at a relatively small amount of commercially unviable local renewable energy through the Clean Energy Finance Corporation, achieve 41,000 gigawatt hours a year of power production under the renewable energy target and put more solar photovoltaic systems on rooftops.

The biggest contribution this country will make to global emissions abatement in these six years is to sell tens of millions of tonnes of LNG to the Asian market, reducing the need of some countries to use still more coal, and to continue selling uranium.

None of the above is an argument for Australia to stop embarking on projects to reduce its national greenhouse gas emissions.

Self-interest alone dictates that a country that exports large volumes of coal and gas should show some willingness in this area.

But it is an argument that should be taken with a very large pinch of salt.

Put crudely, it matters not a toss whether we achieve a five per cent reduction in emissions (from 2000 levels) in 2020 or two per cent or 10 per cent.

Globally, emissions will continue to rise, and it is the global contribution that matters in terms of the impact on planetary warming through human agency.

What real life requires us to do is to ensure that our energy developments over the next six years lay the platform for secure and reliable supply over the next 10-15 years; provide energy at a cost level that does not impose hardship on those who cannot afford expensive supply and at a price that enables local business to compete internationally; and contribute to national carbon abatement.

In the electricity sector, working to deliver a more diverse portfolio of generation resources for the 2020s while avoiding unnecessary costs for consumers is a key to government stewardship.

What the Rudd-Gillard-Rudd governments and the Howard government before them failed to deliver is a comprehensive and cohesive energy strategy that identifies and prioritises goals, ensures consumers are equipped to manage their energy use through price signals and is technology neutral.

All of this needs to be backed by a regulatory approvals process for energy that is trustworthy (for the community and investors), transparent and not subject to kneejerk political tweaks to respond to issues of the day.

It needs to be set in a market environment where governments are not both arbiters of policy and regulation and owners of assets, where prices are not subject to political whims and where consumers are provided with both the tools (metering technologically, cost-reflective prices) and the information they need to make best use of energy.

The Coalition has not set out its energy platform in this election campaign with anything like the necessary clarity and, under it, the greatest danger the country faces in this area is not whether we achieve a five per cent emissions cut in 2020 but whether a new government continues to muddle through rather than cut through to present a workable, durable energy policy.

It is also a fact that the Rudd-Gillard-Rudd governments have not done nearly enough to deliver this approach and that nothing the Prime Minister has said in the past month suggests he even understands the issue.

As for the Greens, who seek to dictate policy by holding a blocking role in the Senate, their complete lack of understanding of the real issues and their other-worldly proposals for and against energy development dictate that they should be shunned by anyone who thinks this issue is one of the key challenges for good government.

If by some quirk of fate, I was to become the czar of energy policy after Saturday, I would do three things: instruct the Productivity Commission to produce a comprehensive assessment of the situation; bring on a full-blown federal parliamentary debate on the report and on how the government proposes to implement its recommendations; and hold a special Council of Australian Governments meeting to decide how to give effect to the new approach and to kill off all the current legislative and regulatory impediments to this.

All of this is far more important than rushing in legislation to kill the existing carbon pricing regime, not least because I suspect the commission would counsel that emissions should be priced and a swag of other schemes abolished.

Actually, I’d do four things. The last would be to embark on a strong national communications effort to ensure that the community understands not only what is being done but why.

Keith Orchison, director of consultancy Coolibah Pty Ltd and editor of Powering Australia yearbook, was chief executive of two national energy associations from 1980 to 2003. He was made a Member of the Order of Australia for services to the energy industry in 2004.

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